Bankruptcy of Silicon Valley Bank caught the breath of Indian startups companies

The bankruptcy of America’s big bank Silicon Valley Bank (SVB) has created panic globally. Meanwhile, the world’s number one rich Elon Musk has proposed to buy Silicon Valley Bank. There is also news that just a week before Silicon Valley Bank went bankrupt, its chairman was in London receiving the Best Banker award. It is being told that due to the bankruptcy of Silicon Valley Bank, millions of dollars of Indian startup companies have got stuck.

Meanwhile, the Biden administration has announced that depositors of this bank will be able to access their money from Monday, with the aim of maintaining strong public confidence in America’s banking system and protecting America’s economy. An official statement said that after receiving the recommendation of the Federal Deposit Insurance Corporation (FDIC) and the central bank Federal Reserve and discussions with President Joe Biden, Treasury Secretary Janet Yellen on Sunday decided to complete the resolution of the bank, as well as depositors. has authorized the FDIC to take steps to fully protect the interests of

It is noteworthy that California-based Silicon Valley Bank, the 16th largest bank in the US, was shut down by the California Department of Financial Security and Innovation on Friday. It has appointed the FDIC as the bank’s resolver. The bank ran into trouble when its customers, including venture capital firms and those backed by them, started withdrawing their deposits. A joint statement issued by the US Treasury, the Federal Reserve and the FDIC said, “Bank depositors will be able to access their full funds from Monday, March 13.” Taxpayers will not bear the burden of losses associated with the resolution of Silicon Valley Bank.” In the statement, a similar systematic risk exception has been announced for Signature Bank of New York. This bank was closed on Monday.

US Treasury Secretary’s clarification

Apart from this, US Treasury Secretary Janet Yellen has said that the government will not provide any relief to Silicon Valley Bank. He, however, said that the government is trying to help depositors who are worried about their money. Let us tell you that the Federal Deposit Insurance Corporation insures deposits up to $ 250,000, but many companies and wealthy people have more than this amount in their bank accounts. In such a situation, it is feared that some workers across the country will not get their salary. US Treasury Secretary Janet Yellen insisted in an interview with the CBS program ‘Face the Nation’ that this situation is very different from the financial crisis nearly 15 years ago, when bank bailouts were given to save industry. He said, “The US banking system is actually very safe and well capitalised. It’s flexible.” Let us tell you that Silicon Valley Bank is the 16th largest bank in America. It is the biggest bank failure in US history since Washington Mutual in 2008. This bank mostly provides its services to technology companies and startups.

dire straits

Meanwhile, in a petition filed with the US government, Y Combinator said that about 10,000 small enterprises with deposit accounts at Silicon Valley Bank will not be able to pay their workers for the next 30 days. The startup-promoting company said that around one lakh jobs could be affected by this bank crisis. On the other hand, Nazara Technologies, a diversified gaming and sports media platform in India, said that an associate unit of its subsidiary has about Rs 64 crore deposited in Silicon Valley Bank.

Government of India alert

Meanwhile, it is reported that Minister of State for Electronics and IT, Rajeev Chandrasekhar will meet people in the startup sector this week to gauge the impact of the bankruptcy of Silicon Valley Bank, closely associated with the technology startup ecosystem. Chandrasekhar tweeted on Sunday, “The closure of SVB will definitely be a problem for startups around the world. Startups are an important part of the New India economy. I will meet people from Indian startups this week to assess its impact and try to find out how the Narendra Modi government can help them in this time of crisis. Most Indian startups, software service providers operating in the US, and companies associated with the incubator Y Combinator will be affected by the bank’s bankruptcy. However, industry people and experts believe that this effect will not last long.